Analyzing Cardano’s Governance Decisions: A Close Look at Recent Proposals
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Key Developments in Cardano’s Governance
On June 3, Input Output Global (IOG) shared a crucial update regarding two significant governance proposals currently under the scrutiny of Cardano’s Voltaire-era voting community. The announcement, made on the platform X, detailed the completion of IOG’s assessment of the Amaru and DeFi Liquidity budget proposals. According to the company, the DeFi Liquidity proposal was deemed unconstitutional, while the Amaru proposal was found to be constitutional.
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This announcement has sparked a renewed discussion about the procedural safeguards enshrined in the Cardano Constitution, a document established in February to lend legal authority to on-chain decision-making processes.
Scrutinizing Cardano’s Proposals
IOG’s decision to oppose the liquidity proposal is based on a crucial rule outlined in Article III, Section 5 of the Constitution. This rule mandates that every governance action must provide a URL for its off-chain documentation and record the cryptographic hash of that file on-chain. This ensures that the document remains unchanged once voting commences.
In the case of the liquidity proposal, the values did not match. IOG’s technical team downloaded the file and generated a Blake2b-256 digest, which differed from the hash embedded in the transaction. This discrepancy renders the proposal unconstitutional, according to IOG, as it leaves voters uncertain about what they are truly approving.
Consequently, unless the proposal’s authors resubmit with consistent metadata, the original ₳50 million, 12-month program aimed at seeding liquidity across Cardano’s decentralized exchanges cannot proceed. While Cardano’s Delegated Representatives (DReps) still have the option to vote, the Constitutional Committee must disregard the results.
Conversely, the “Cardano Blockchain Ecosystem Budget: Amaru 2025” proposal passed IOG’s review successfully. This project seeks ₳1.5 million to support an alternative Cardano node implementation in Rust. Governance Space records reveal that the proposal has garnered over 90% “Yes” votes, surpassing the required 50% threshold for treasury-related actions.
IOG’s analysis underscores several constitutional elements: the proposal’s purpose aligns with the decentralization goals outlined in the Preamble and Article I; it adheres to the standard metadata format required by Article III, Section 5; it offers a clear fund-administration framework compliant with Article IV, Section 2; and it confirms that the requested funds will not exceed the Net-Change Limit specified in Article IV, Section 3. However, IOG raised a concern about the line-item for “Ad-hoc mercenaries” to conduct audits, recommending clarification before fund disbursement.
Looking Ahead
Under Cardano’s CIP-1694 governance framework, DReps have until epoch 563 (June 8) to cast their votes. If the DeFi Liquidity proposal retains its flawed metadata, it is likely to be dismissed, regardless of the voting outcome. In contrast, the Amaru budget is on course for approval. Once ratified, its administrators will be able to access funds in stages, subject to on-chain spending scripts and oversight from PRAGMA’s legal framework.
This situation highlights the critical importance of adhering to the Constitution’s seemingly mundane formatting requirements. Without an exact anchor-hash match, the “single source of truth” principle that ensures the immutability of Cardano proposals could be compromised, paving the way for undetectable bait-and-switch edits. As IOG stressed, the mismatch undermines the constitutional mandate for a clear, verifiable, and consistent link between on-chain governance actions and their off-chain specifications.
At the time of writing, ADA was trading at $0.69.
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